Obama Re-Election Could Slow Some Dodd-Frank Rules

President Barack Obama’s re-election means there will be no major changes to the landmark Dodd-Frank financial law enacted in the wake of the financial crisis.

But the re-election could put the brakes on a raft of Dodd-Frank regulatory rules yet to be written, including major rules governing the multi-trillion dollar swaps industry, said Gary DeWaal, special adviser to futures broker Newedge.

The reason: Mr. Obama’s re-election will take pressure off of regulators, such as the Commodity Futures Trading Commission, that were scrambling to pass a mountain of rules before year-end under the threat that a Republican president could roll back or water down the rules.

“A lot of the momentum that was driving the CFTC was precipitated by a fear that the administration was going to change,” says Mr. DeWaal.

While there was little chance that Republican presidential candidate Mitt Romney would have been able to repeal Dodd-Frank — a move that would almost certainly have been blocked by the Democratic-controlled Senate – Mr. Romney likely would have appointed more industry-friendly agency officials responsible for implementing large parts of the law.

In a Romney administration, many rules in the pipeline might have languished or been substantially different than rules passed under a Obama administration. “That’s off the table now,” says Mr. DeWaal.

Now, he says, the industry’s hope is that regulators, with less pressure to pass rules quickly, will be more flexible and open to industry feedback.

One thing is certain: Many in the financial industry had been pulling for a Romney victory in the hope that many of the tougher parts of Dodd-Frank, such as the Volcker rule, would be softened. With those hopes dashed, the industry is sure to put even more pressure on regulators as they continue to implement the most significant financial reform seen since the 1930s.

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